The growing popularity and repurposing of existing residential facilities into short-let apartments in major cities, particularly Lagos and Abuja, is reshaping the property market, with experts warning that the trend is contributing to declining rental stock and rising housing costs, VICTOR GBONEGUN reports.

The growing demand for short-let apartment rentals in major city centres is beginning to reshape Nigeria’s housing market, with concerns that the trend may be reducing the availability of conventional residential housing.

The shift has become noticeable as some residential properties originally developed for long-term occupation are being converted into short-term accommodation in cities such as Lagos, Abuja, Port Harcourt and Ibadan, which continue to attract domestic and international visitors.

Property owners and landlords in strategic urban locations are increasingly abandoning the traditional 12 to 24-month tenancy model for short-let apartments to maximise returns on their investments.

Industry observers warn that in an unregulated short-let environment, every residential property converted into short-let accommodation could further increase pressure on housing supply, leaving more families competing for fewer available homes as property owners prioritise higher returns over long-term residential needs.

Many visitors patronising short-let apartments are seeking premium temporary residences that provide comfort, privacy and proximity to business districts, entertainment hubs and nightlife destinations.

By definition, short-let refers to the rental of residential apartments for brief periods, ranging from daily and weekly stays to a few months, unlike conventional tenancy arrangements, where occupants typically maintain agreements of 12 months or longer.

Property owners have increasingly embraced the model because of its flexibility and perceived investment benefits. Operators say short-let apartments allow guests to manage their schedules, prepare meals and enjoy more personalised living arrangements, compared with traditional hotel accommodation.

Some landlords also argue that short-let properties experience fewer long-term maintenance challenges because regular cleaning, inspections and turnover management help reduce major renovation costs often associated with changing long-term tenants.

According to the BuyLet Live 2024 Nigeria Property Price Index Report, short-let apartment prices in Lagos recorded significant growth, rising by over 200 per cent in 2024 after a 12.95 per cent increase in 2023, making it one of the fastest-growing segments of the state’s residential market.

The sector has also become a major contributor to Lagos’ hospitality and real estate economy. A report by Edala Development estimated that the short-let market generated about N281.03 billion in revenue during the 2025 Detty December period despite high inflation and increased competition.

The short-let market report 2025 noted that the era of rapid, largely unregulated expansion may be approaching its peak, but the sector remains a key driver of urban real estate activity. The report projected that revenues could rise to N285.5 billion in 2026, supported by population growth and continued demand for flexible accommodation.

The report identified Lekki as the largest revenue contributor, with Lekki Phase I and Phase II generating nearly N165 billion combined in 2025. Victoria Island followed, with revenue rising to N34.8 billion. However, Banana Island recorded a sharp decline to about N9 billion following regulatory restrictions, with projections indicating further decline after the suspension of short-let activities in the estate.

A survey by The Guardian showed that short-let apartment prices vary widely depending on location, size and available facilities. In some Lagos neighbourhoods, studio apartments range from about N40,000 per night, while one-bedroom and two-bedroom units can cost between N50,000 and N160,000 or more in the mid-level market.

In Abuja, a one-bedroom short-let apartment with a kitchen and 24-hour power supply can cost as much as N180,000 per day, while two-bedroom apartments range between N80,000 and N130,000. Three-bedroom units can attract between N280,000 and N300,000 daily, depending on location and amenities.

In Port Harcourt, checks showed that the average daily cost of short-let apartments is about N120,000, while in Ibadan, prices range between N80,000 and N150,000 per day depending on location, size and facilities.

However, the rapid expansion of short-let apartments has also generated concerns around security, regulation and community planning. Recently, Banana Island Estate in Ikoyi, Lagos, suspended short-let operations, alleging that the arrangement was becoming a channel through which criminals gained access to the estate, undermining years of investment in security, privacy and controlled residential living.

The Banana Island Property Owners and Residents Association said the temporary nature of short-let arrangements makes it difficult to properly track occupants, enforce community rules and maintain consistent security standards in an estate designed primarily for permanent residents.

Speaking on the trend, Chairman, Faculty of Estate Agency and Marketing, a division of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Mr Yemi Stephens, said the rapid growth of short-stay apartments was driven by a combination of economic, social and technological factors.

He noted that while the sector presents opportunities for investors and urban accommodation needs, proper regulation would be necessary to balance profitability with the need to preserve adequate housing supply for residents.

According to him, Lagos’ position as a commercial hub has increased demand for furnished apartments among business executives, consultants, expatriates and corporate teams who prefer short-let accommodation to hotels during extended stays.

“The rapid rise of short-lived apartments in Lagos and others is driven by a combination of economic, social and technological factors. Lagos remains a major commercial hub. Business executives, consultants, expatriates and their teams come in, do their business and leave.

They prefer furnished apartments to hotels because of the extended days they may remain in the country,” Stephens said.

He added that tourism, family visits, weddings and entertainment events have also contributed to demand for short-let apartments, although domestic tourism remains relatively modest.

Stephens noted that many landlords are increasingly embracing short-lets because of the higher returns obtainable in prime locations such as Lekki, Ikoyi and Victoria Island. “In situations where a short-let is charging N400,000 per day, there is no way a property owner will lease the property in those prime locations and be able to net that kind of amount yearly,” he said.

He explained that the emergence of online platforms such as Airbnb and Booking.com has made it easier for property owners to advertise apartments to local and international guests, accelerating the shift from traditional rental arrangements.

“Airbnb and Booking.com have made it easier for property owners to market their apartments online. These were not happening before. It has actually impacted the residential market seriously,” he said.

According to him, many guests now prefer short-let apartments because they provide a home-like experience, including kitchens, living rooms, laundry facilities, privacy and, in some cases, improved security within gated estates.

However, Stephens warned that the growing preference for short-lets is reducing available housing stock for conventional tenants and contributing to rising rents. He explained that many apartments that would ordinarily have entered the one-year or two-year rental market are now being converted into short-stay units.

Despite the benefits, Stephens said short-lets also come with challenges, including high maintenance costs, utility expenses, security concerns and regulatory restrictions. He noted that some estates in Lagos, including Victoria Garden City, Parkview and Banana Island, have introduced restrictions on short-let operations.

“Short-lets have their downside too. Maintenance and utility costs, security concerns and the risks associated with some guests are issues landlords have to consider,” he said. Nevertheless, he observed that the growth of short-lets is forcing landlords to improve the quality of their properties to compete in the market.

“Short-let apartments are breeding competition. You must do your house in such a way that you have all the essential facilities. If landlords are leasing furnished apartments now, they do it in a way that they can fairly compete with short-lets,” Stephens added.

Research Director, Fortren & Company, Mr Martin Uche, also confirmed that the short-let trend is already affecting the residential rental market. “We have seen the impact already in the market. One of the impacts is a shortage in available stock of residential units for rent,” he said.

Uche explained that when landlords and investors convert residential properties into short-stay apartments, the supply available for traditional tenants reduces, creating pressure on rents. “When stock is low, or supply is low and there is higher demand, it pushes price up,” he said.

He noted that the impact is particularly visible across major property corridors in Lagos and Abuja, where apartment prices have nearly doubled over the past two years due to limited rental supply.

According to him, Nigeria’s housing challenge is not necessarily a shortage of properties for sale but a lack of affordable and quality rental stock. “There are a lot of properties available for sale, but there are not many stocks available for rental. So, it is just going to exacerbate that pressure on that segment of the market by reducing available residential units for rent,” he said.

Uche highlighted the wider challenges confronting developers, including rising construction costs, foreign exchange instability, expensive financing and high energy costs. He said the real estate market operates within a capitalist environment where developers naturally pursue projects that offer the strongest returns.

Uche explained that developers increasingly prefer building for sale rather than rental because quick sales allow them to recover capital and finance new projects. “For a developer who raises N2 billion, how much money he makes depends largely on his ability to put that money into a project, quickly sell it and do another one,” he said.

He expressed concern that limited progress in social housing interventions has worsened the housing deficit, adding that current economic conditions do not encourage private developers to invest in large-scale affordable housing.